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What Do Isolated National Capital Cities Say About Misgovernance?

December 20, 2012

By Doug Gavel, Harvard Kennedy School Communications

What does the isolation of a capital city say about the government that is based there? In a previous Harvard Kennedy School (HKS) Faculty Working paper, HKS Associate Professor Filipe Campante found that isolated state capitals are associated with increased levels of government corruption in the U.S. Now Campante and two fellow researchers take their study to the national level.
In “Isolated Capital Cities and Misgovernance: Theory and Evidence,” Campante and co-authors Quoc-Anh Do and Bernardo Guimaraes seek to shed light on the relationship between national governments, the threat of rebellion, and the location of capital cities.
“We start off motivated by a basic – and as far as we can tell, novel – stylized fact: countries with isolated capital cities display worse quality of governance,” the authors write. “Pairing this stylized fact with the historical evidence that capital cities have often played a pivotal role in determining the outcome of insurgencies and revolutionary standoffs, and that incumbents seem to react to the incentives posed by this role, we posit that the link between isolated capitals and misgovernance is far from coincidental.”
The paper develops "a model of endogenous institutions where an autocratic elite's choices are constrained by the threat of rebellion, and where the threat posed by any individual as a potential rebel decreases with her distance to the seat of power,” the authors describe. “In this model, isolated capital cities allow the elite to extract more rents from citizens without triggering a rebellion, (…) hence decreasing incentives for power sharing and the better governance associated with it. Conversely, broader power sharing discourages the choice of an isolated capital city, since it leaves the elite with relatively lower rents to protect.”
The authors then examined a range of historical and institutional data to test their theory, and found a positive correlation between isolated capital cities and misgovernance, but only in the case of autocratic regimes -- exactly as predicted.
The authors conclude: "To the extent that we care about the quality of governance – either as an end in itself or as a means of fostering development – the lesson is that one should be especially attentive to those countries where the spatial distribution is particularly inimical to accountability. Among those countries that are relatively non-democratic, and for a given level of consolidation of democratic institutions, one should bear in mind that those regimes that are able to ensconce themselves in an isolated capital are likely to face lower accountability and thus be less responsive to their citizens."Filipe R. Campante is Associate Professor of Public Policy at Harvard Kennedy School. He is interested in political economy and economic development, with special emphasis on understanding the constraints that are faced by politicians and governments beyond elections and formal "checks and balances". His research has focused on the constraints imposed by the spatial distribution of population, the media, political protest, lobbying, and campaign contributions, and their effects on corruption, governance, polarization, fiscal policy, and political instability.

"To the extent that we care about the quality of governance – either as an end in itself or as a means of fostering development – the lesson is that one should be especially attentive to those countries where the spatial distribution is particularly inimical to accountability," write the authors.